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daser333 [38]
3 years ago
12

Weighted average cost of capital American​ Exploration, Inc., a natural gas​ producer, is trying to decide whether to revise its

target capital structure. Currently it targets a 50​-50 mix of debt and​ equity, but it is considering a target capital structure with 70​% debt. American Exploration currently has 6​% ​after-tax cost of debt and a 12​% cost of common stock. The company does not have any preferred stock outstanding. What is American​ Explorations current​ WACC?
Business
1 answer:
saw5 [17]3 years ago
3 0

Answer:

American​ Explorations current​ WACC is 9%

Explanation:

The computation of WACC is shown below:

= (Cost of equity × equity percentage) + (after-tax cost of debt × debt percentage)

= (12% × 50%) + (6% × 50%)

= 6% + 3%

= 9%

Since we have to compute only current WACC so we considered the 50-50 ratio. Hence, we ignored 70% cost of debt

WACC shows a relationship between debt, equity and the preferred stock.

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Rasek [7]

Answer:

a.

Date          Account Details                                  Debit                       Credit

                 Cash                                                $27,000

                 Common Stock                                                                 $27,000

b.

Date          Account Details                                  Debit                       Credit

                 Land                                                 $9,000

                  Notes Payable                                                                  $9,000  

c.

Date          Account Details                                  Debit                       Credit

                 Vehicles                                           $18,000

                 Cash                                                                                 $2,000

                 Notes Payable                                                                 $16,000

d.

Date          Account Details                                  Debit                       Credit

                 Vehicles                                               $800

                 Cash                                                                                    $800

e. This does not require a journal entry as it is a personal transaction.

3 0
3 years ago
Advertising plays an important role in helping a firm develop and manage its brands. T/F
klasskru [66]

Answer:

The given above statement that advertising helps in developing and managing brand is true.

Explanation:

For a company, brand management ( which means developing and maintaining brand image of your company, in order to create a good relationship with its target consumers ) is very important for its success and proper advertising and promotion can help in creating a good brand image of the company.

With the help of advertisement, a company can deliver a message to its target consumers telling about the benefits of its brands and why their brand is much better than other competitors , and by delivering this message , a company would be able to influence the purchase decision of its consumers.

4 0
3 years ago
Title VII of the Civil Rights Act provides employees with a statutory right to complete religious freedom in the workplace. a. T
Norma-Jean [14]

IS TRUE ,Title VII of the Civil Rights Act provides employees with a statutory right to complete religious freedom in the workplace.

<h3>Does Title VII apply to religion?</h3>

Title VII of the Civil Rights Act of 1964 prohibits employment discrimination based on religion. This includes refusing to accommodate an employee's sincerely held religious beliefs or practices unless the accommodation would impose an undue hardship (more than a minimal burden on operation of the business)

Title VII also prohibits workplace or job segregation based on religion (including religious garb and grooming practices), such as assigning an employee to a non-customer contact position because of actual or feared customer preference.

Learn more about Civil Rights Act on:

brainly.com/question/11079956

#SPJ4

5 0
1 year ago
A customer buys $10,000 of Government Bond Fund shares from Acme Investors, a fund sponsor and broker-dealer. Acme is the sponso
timofeeve [1]

Answer: customer will pay a sales charge

Explanation:

The statement which states that customer will have to pay sales charge in order to exchange shares within the family is not true. The fund family possesses an "exchange feature" at NAV. This means that the shares of one fund has the right to be redeemed and then reinvested in shares of another fund that is within the family without no sales charge.

For the customer that is exchanging Government bond Fund shares for the Growth Fund shares, tax event has occurred. Therefore, it will be expected that the customer's yield will reduce but that the capital gains will increase, because the person is moving from an "income" fund into a "growth" fund.

3 0
2 years ago
The relationship between borrowed reserves (BR), the nonborrowed monetary base (MBn), and the monetary base (MB) is Question 14
AnnyKZ [126]

Answer:

Option C.

Explanation:

Borrowed reserves = Monetary base - Nonborrowed monetary base

Borrowed reserves are the money that the Federal Reserves System member borrows from the Federal Reserve Bank to maintain the required reserve.

Amount of total currency which is in circulation in the public in the present time or the amount of currency which is held in the commercial bank deposits in the central bank's reserves is termed as Monetary Base.

The fund that is held by a financial institution in cash is termed as Nonborrowed Monetary Base.

3 0
3 years ago
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